Economy of Moldova

Economy - overview: Moldova enjoys a favorable climate and good
farmland but has no major mineral deposits. As a result, the economy
depends heavily on agriculture, featuring fruits, vegetables, wine, and
tobacco. Moldova must import all of its supplies of oil, coal, and natural
gas, largely from Russia. Energy shortages contributed to sharp production
declines after the breakup of the Soviet Union in 1991. As part of an
ambitious reform effort, Moldova introduced a convertible currency, freed
all prices, stopped issuing preferential credits to state enterprises,
backed steady land privatization, removed export controls, and freed
interest rates. Yet these efforts could not offset the impact of political
and economic difficulties, both internal and regional. In 1998, the
economic troubles of Russia, by far Moldova's leading trade partner, were
a major cause of the 8.6% drop in GDP. In 1999, GDP fell again, by 4.4%,
the fifth drop in the past seven years; exports were down, and energy
supplies continued to be erratic. GDP declined slightly in 2000, with a
serious drought hurting agriculture. Growth should turn positive in 2001.